Jin-Gyu Park and Jun-Hyung Kim (2019. 4), "Issues and Solution on Appraisal of Commercial Properties: Focused on Office," Appraisal Studies, 18(1): 5-28.
Abstract
This study elicited the problem of appraisal of commercial properties by focusing on office, comparing it with the overseas improvement scheme as follows: case and presented the concrete First, the appraisal method of commercial properties is not specifically confined to the sales comparison approach but the criterion for appraisal needs to be amended to use the sales comparison approach and the yield capitalization method at the same time. And it should be obligatory to apply the income approach in appraising commercial properties so as to observe the principle of market value. Second, there is a need to introduce the principle of highest and best use as a major principle of appraisal standard guideline so as to correspond with the principle of market value. This would make it possible to determine an accurate market value by maximally excluding voluntariness in selecting the cases of sales comparison, comparing the factor of value formation and applying the net income, capitalization rate and discount rate in relation to the simultaneous application approach. Third, to correspond with of the comparison approach and the the income international stream of appraisal, appraisers should not be forced to follow the methodology of determining the value of commercial properties on the basis of the sales comparison approach in advance. Rather, they should be obligated to adjust the indicated value to determine it according to the characteristic of commercial properties, the reliability of used data and the objective of appraisal by applying such diverse approaches as possible.
Keywords
Commercial Properties; Real Estate Appraisal; Market Approach; Income Approach; Highest and Best Use; Office